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California rice industry nervous about GMO contamination 1,600 miles away

The California rice industry has twice staved off major controversies over genetically modified (GM) rice on its own turf only to find itself justifiably nervous today with the discovery of GMO long grain rice contaminating commercial conventional, stored rice more than 1,600 miles away.

The discovery of the long grain GMO rice in bins of commercial rice storage in Missouri and Arkansas drew a swift response from Japan, a major California rice customer. Japan banned long grain rice imports from the U.S. immediately after USDA announced the discovery. The discovery also sent rice futures plummeting.

However, the California rice industry exhaled a big sigh of relief when Japan’s announcement banning U.S. long grain rice imports excluded medium and short grain rice, the exclusive rice types grown in California’s 500,000 acres of rice paddies.

Tim Johnson, president of the California Rice Commission, said California grows a very small percentage of long grain rice, but it is all sold domestically.

“Ninety-five percent of California’s production is medium and short grain rice,” said Johnson. About 50 percent of California’s rice crop is exported annually. The same percentage holds for all U.S. rice.

While the ban on U.S. long grain imports does not impact the sale of California rice to Japan, it did have a major, immediate impact on the futures market for rice. That has California rice growers and marketers nervous.

According to Mike Zarembski of Xpresstrade, the recent price surge in rice futures came to an abrupt halt when USDA and Bayer CropScience announced that traces of unapproved genetically rice were found in bins of commercial rice grown in 2005 in Arkansas and Missouri. The Bayer variety, LL (Liberty Link) 601, had not been grown since 2001.

Although it was not approved, the gene in it was in other Bayer rice varieties deemed safe by the federal government. This did not stop Japan from banning U.S. long grain imports.

However, a quick response by Secretary of Agriculture Mike Johanns, may have precluded Japan from halting shipments of California-grown rice as well as minimizing additional damage elsewhere in the world. The Middle East, Europe, Mexico, South American and African nations, all major importers of U.S. rice, did not follow Japan’s lead.

Rather than banning imports, the UK demanded a test be developed to detect LL 601 rice in commercial shipments. USDA is rushing to certify a test that would identify unsanctioned, genetically modified LL601. Bayer is supporting this effort with information about how it distinguishes the suspect strain.

By Tuesday after the Friday announcement of the GMO rice discovery, rice futures plunged to a two-week low. However, on Wednesday figures staged a modest comeback. Some believe this recovery may be in reaction to the swift response from USDA and Bayer to the crisis in quickly developing the UK-requested text to preclude GMO rice from being imported into Europe.

Johnson had high praise for the U.S. secretary of agriculture’s response to the GMO find. Johnson said Johanns statement that the gene used in the unapproved variety was identical to the one used in two other Bayer deregulated GMO varieties evaluated by USDA and the Food and Drug Administration and deemed safe drew a “measured response from the export market, and that was encouraging.”

“The protein found in LLRice 601 has been repeatedly and thoroughly, scientifically reviewed and used safety in food and feed, cultivation, import and breeding in the U.S. as well as nearly a dozen countries around the world,” said Johanns.

USDA jumped high when the UK hollered frog. The 25-country EU UK is significant because it bought about 300,000 tons of U.S. rice last year with 85 percent of it long grain. The EU bans GMO rice imports.

However, the crisis may not subside soon. One reason, according to a "New York Times" article, is that the Riceland Food bins from which the GMO rice came may have come from states other than Arkansas and Missouri.

According to the Times, Riceland Foods is a cooperative that markets rice from Mississippi, Louisiana and Texas as well as Arkansas and Missouri.

Also according to the Times, Riceland was quoted as saying “The positive results were geographically dispersed and random throughout the rice-growing area.”

The futures market is already skittish and any more bad news could send prices back down.

“Further selling pressure may be forthcoming,” said Zarembski. “as commodity funds are controlling in a heavy net-long position of nearly 4,500 contracts.” These “momentum players” said the market analysis did not like the two—day price nose dive and “liquidation selling may come at any time, triggering speculative sell-stops along the way.” He said the market will be looking for further word from U.S. officials on the extent of the contamination.

Johnson does not expect any negative word from California. He said LL 601 has never been tested on the state’s rice experiment station at Biggs, Calif.

However, USDA is asking for station officials to provide samples of more than a dozen rice varieties that are grown on the station.

California is the second largest rice producing state in the U.S. behind Arkansas.

Japan is one of California’s primary customers. To appease its GMO-skittish trading partner the California Rice Certification Act of 2000 was passed to establish regulations to avoid mixing of different rice types. An advisory board was created by the law to approve and create protocols for any new rice introduce into California. As a result, Johnson said no genetically modified rice is grown commercially in California.

However, the new law did not make the issue go away in the state. Two years ago a pharmaceutical company wanted to grow GMO rice to harvest proteins for medicine. The regulations imposed on the company eventually forced it to leave the state and created a headline-grabbing controversy.

The GMO issue surfaced again when anti-biotechnology activists managed to get a proposed ordinance banning GMO crops on several county election ballots, including one in Butte County, the heart of Sacramento Valley rice production.

California rice growers found themselves in a dilemma in the wake of the pharmaceutical controversy, but the majority of county rice growers opposed the anti-GMO initiative because they thought it was too restrictive and would inhibit research on the experiment station at Biggs, which is in Butte County. Rice growers played a key role in defeating the anti-biotech initiative in Butte, which many believed would prohibit other GMO crops like herbicide-resistant alfalfa from being grown in the county.

The California industry will be watching this GMO long grain rice controversy unfold halfway across the nation. One of the biggest unanswered questions is how rice presumably last grown five years ago wound up in rice produced in 2005.

One of the fears growers have in seeing GMO food crops grown next to conventional crops is contamination in the hauling and processing of the two crops. LL 601 rice left in trucks in ’01 contaminating crops grown four years later is one explanation being offered for the mid-South crisis.

However, that is a long spread between harvests for contaminated rice and clean grain to cause co-mingling.


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